Research identifies SVoD ARPU-driving factors
July 16, 2024
‘500 channels and nothing to watch’ is the familiar refrain of customers frustrated with expensive cable packages. In today’s streaming world, a similar question remains: with so many platforms and abundance of content from which to choose, what’s worth paying for?
Hub Entertainment Research’s annual Monetization of Video study reveals that even with consumers feeling the bite of inflation, some features and content may drive additional spend from consumers.
Consumers feel maxed out on the cost of TV.
The average US respondent estimates they are spending $82 (€75.16) a month on TV content, very close to what they say is the maximum they’d be willing to pay ($87).
More expensive ad-free services are stickier than cheaper (or free) ad-supported ones.
Despite the plateau in overall spend, people paying extra for ad-free services consider them more valuable and are more loyal. Cheaper ad-supported and FAST services such as Pluto and Tubi have helped to fill the gaps for people tapped out on spending, but loyalties to those services may not be as strong. In comparison, subscribers to ad-free services are significantly more likely to say they’ll still be using that service a year from now.
Price matters – but for the right features and content, people are willing to pay.
Respondents prioritised 16 features based on how much value each adds to a streaming or TV service. Not surprisingly, features related to price were among the highest scoring:
- A lower price than other services with similar content added the most value
- A choice between ad-free or a less expensive ad-supported tier also scored
But most of the other top items had to do with content: access to recent theatrical movies, original shows, and access to all seasons and episodes of each show all make a platform more valuable. And in aggregate, those content attributes matter more than just a low price.
“These results are encouraging for streamers under pressure to maximise profits,” notes Jon Giegengack, Principal at Hub. “Consumers are feeling the pinch of inflation. But even so, key content like theatrical movies and exclusive originals are as important as cost – great news for platforms that need to raise prices, not lower them.”